Download Introduction to the Economic Problem

Teaching Note A for
The Contribution of Catholic Social Thought to
a Macro Economic Principles Course
Introduction to the Economic Problem
Charles M. A. Clark
St. John’s University
Email: [email protected]
Here I want to lay out a broad perspective that allows for ethical analysis, explicitly reject the
rigid positive/normative dichotomy. Otherwise, CST is an artificial add-on, not something that
gives deeper meaning.
The first job of any discipline is to first define itself and its parameters. How economics is
defined at the outset will determine what gets included and what gets excluded from the
discussion. Most textbooks use Lord Robbins’s definition: “Economics is the allocation of
scarce resources between competing wants”, but that is really about economizing, what
individuals do when they go shopping, not economics in total. It is part of economics, but
economics is so much more. Neoclassical economics uses this definition partly because it is
based on “methodological individualism,” the idea that all explanations of economic activity
have to be based solely on individual decision making. To bring in ethics, and particularly
Catholic ethics, you cannot limit your purview to individual decision making, for Catholic ethics
completely rejects moral relativism and individual ethics (what is right for me), which is what
methodological individual would allow. Furthermore, CST recognizes the role of socialization
and authority. If you want to include CST you need to take a broader, and older, definition of
economics, such as: “The economic problem is about how societies provide for their material
reproduction; which includes tradition, command and markets”. You also need to emphasize
that just about every economy has been a mixture of tradition, command and market, and that a
pure market or pure tradition or pure command economy could not work. Tradition is where
culture and values influence economic activity; command is where power (political and
economic) play a role, and of course markets are when prices and individual decisions play a
role. But individual decisions are influenced and shaped by tradition (what I value should shape
my purchases) and command (rules and regulations that shape, limit and allow for individual
economic actions to occur. We forget the business activity is greatly dependent on the Uniform
Commercial Code and tax code). A broader definition of economics allows us to see that, as
Benedict XVI notes in CV, all economic actions are moral actions. The article: Clark, C.
“Catholic Social Thought and the Economic Problem” OIKONOMIA, No. 1, Feb., 2001, pp. 618, gives a broader definition of economics and how CST informs our understanding of the
economic problem. This broader definition is used by Robert Heilbroner in The Making of
Economic Society and is based on the Classical Economists. But even Alfred Marshall (greatest
neoclassical economist, IMHO) defined economics as man going about making his living (not
very politically correct today, but insightful none-the-less).
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